Cultural fit and employee turnover
In contrast to the research in the previous section, which generally implies a direct effect of organizational culture on turnover, research on person-culture fit, or person-organization fit, suggests that it is the alignment between the values of the individual and those of the organization that drives turnover in organizations. Note that the terms person-culture fit and person-organization fit are both used in the literature, seemingly interchangeably, which is appropriate because both are focused on alignment between individuals’ values and the organization’s values. Thus, we will also use both terms, although person-culture fit is more aligned with the focus in this chapter on organizational culture.
Highly relevant to the discussion of fit and turnover is the attraction-selection-attrition (ASA) cycle as first described by Schneider (1987). Schneider proposed that individuals will be differentially attracted to occupations and organizations, that selection systems will result in individuals being hired who are more similar to those currently in the organization relative to those not hired, and finally that individuals who do not fit the organization will be more likely to leave than those who do fit. Empirical research has offered support for this model (e.g., Bradley-Geist & Landis, 2012; Ployhart, Weekley & Baughman, 2006; Schaubroeck, Ganster & Jones, 1998; Schneider, Smith, Taylor & Fleenor, 1998), although the focus is typically on personality rather than other individual difference variables (e.g., values). The last piece of the ASA cycle focusing on attrition is most germane to this chapter. Applied to organizational culture, the argument is that those individuals whose values do not align well with the values embedded in the organization’s culture will be more likely to turnover, whereas those individuals with similar values will be more likely to stay. Over time this process strengthens the organization’s culture and results in an increasingly homogeneous set of employees (Schneider, 1987).
Before discussing specific studies of fit, it is important to note that fit can be assessed in several ways (Kristof, 1996). Subjective fit is assessed when individuals are directly asked how they perceive their fit with the organization. Perceived fit is assessed when individuals are asked to describe their own characteristics or values and then to report the organization’s values; these are used to calculate a fit score. Finally, objective fit is assessed similarly to perceived fit, except current employees’ ratings are used to measure the characteristics (or culture) of the organization, which are then used with the individual’s self-ratings to calculate fit.
Although there are several empirical studies finding evidence that person-culture fit is related to turnover rates, one of the most notable ones is O’Reilly, Chatman and Caldwell (1991). These researchers provided some of the earliest and most compelling evidence that person-organization fit was related to turnover in a sample of accountants from eight large American public accounting firms. They showed that objective person-organization fit was significantly correlated with turnover intentions one year later (r=-0.37), and using survival analysis, demonstrated that person-organization fit was significantly related to actual turnover two years after the initial measurement of fit. Others providing evidence that fit is related to turnover rates include Chatman (1991) and Vandenberghe (1999).
Perhaps the most useful evidence for the relationship between fit and turnover comes from meta-analyses that have been conducted on the relationship between person- organization fit and turnover intentions and turnover. With regard to turnover intentions, Verquer, Beehr and Wagner (2003) reported an overall corrected correlation of -0.21, although the strength of this effect was moderated by a number of factors, including the type of fit, with the strongest relationships for subjective fit, followed by perceived fit and objective fit. Kristof-Brown, Zimmerman and Johnson (2005) reported stronger results for turnover intentions, with a corrected correlation of -0.35 (-0.47 after removing Vancouver & Schmitt’s 1991 study which had a particularly large sample size). With regard to actual turnover, Kristof-Brown and colleagues (2005) reported a corrected correlation with person-organization fit of -0.14 across all the studies they included. The results were slightly stronger when distinguishing between indirect measures of fit (perceived fit or objective fit; r = -0.12) and direct subjective measures (r=-0.16).
In summary, although there is solid evidence that certain cultures are more or less desirable in general to employees, research suggests that organizational cultures may also vary in their desirability among employees depending on the fit between each employee’s values and the values embedded in the organization’s culture. Despite the evidence that person-culture fit matters, more work is needed. For instance, organizations can have many different values; thus, it would be helpful to identify whether an employee has to fit well with all organizational values or just some of them, and, relatedly, whether fit with certain values is more important than fit with others. Research is also needed to understand whether strong cues in the work environment can change or shape an employee’s work values. Such research should help organizations identify strategies for attracting, selecting and retaining desirable employees. Finally, other types of fit, such as the fit between individuals’ ideal cultures and their perceived current culture (Harris & Mossholder, 1996), should be examined relative to other measures of person-culture fit to understand their relative contributions to turnover.